Maui room rates up even while occupancy declines

December 25, 2013

Despite slacking demand for rooms in October, Maui's hotels generated more money for the month by two key indicators - average daily rates and revenue per available room, according to the monthly report from Hospitality Advisors.

Valley Isle hotel occupancy was down 2.8 percentage points to 66.1 percent in October, normally a slow month in the islands' visitor industry. Statewide, occupancy fell 1.7 percentage points to 72.7 percent. Kauai was the only island to see a rise in occupancy in October, from 67.8 percent a year ago to 69 percent this year.

Maui's average daily room rate rose $16.20, or 7.4 percent, to $235.39 (a new record high for October). Meanwhile, the island's revenue per available room increased $4.57, or 3 percent, to $155.59. Hospitality Advisors noted that both increases in hotel income reflected a 1.5 percent increase in per person daily spending on Maui in October.

Wailea set an October average daily room rate record high of $351.63, a 9.4 percent increase over the same month a year ago. The Wailea room rate is the highest in the state, 39 percent higher than the Kohala Coast's $253.13 daily rate on the Big Island, the next highest price on another island.

Oahu's average room cost was $201.12 in October, an 11.5 percent increase from the same month a year ago, and Kauai's average rate was $209.56, a 5.9 percent rise for the month.

Despite its high daily room rate, Wailea saw a 2.1 percent decline in its revenue per available room. The only other area to see a decline, albeit a small one, was the Big Island's Kohala Coast, where available room revenue fell 78 cents, or a half a percentage point, to $144.03.

Part of the explanation for Wailea's overall revenue decline was a 7.6 percentage point drop in the area's occupancy rates in October from 72.1 percent in 2012 to 64.5 percent this year.

Hospitality Advisors reported that Hawaii hotels set an October room revenue record of $269 million, or 7.2 percent more than the same month last year. Statewide, daily room rates rose 9.7 percent to a new high for the month of $208.85.

The hotel and tourism consulting service attributed lower occupancy rates statewide to a 1.2 percent decline in visitor arrivals as reported by the Hawaii Tourism Authority. While international visitor arrivals rose by 8.8 percent, there was a sharp drop in visitors coming from the U.S. West and East coasts, the two largest tourism markets for Hawaii.

Oahu's occupancy rates were the state's highest in October at 80.8 percent, while the island's resort area of Waikiki outperformed that with 83.2 percent of its rooms filled in the month. Both occupancy rates fell short of occupancy rates of 82 percent for Oahu and 83.8 percent for Waikiki in October last year.

The hotel survey is compiled monthly by Smith Travel Research in conjunction with Hospitality Advisors. In October, the survey included 162 properties representing 48,393 rooms, or 84.6 percent of all lodging properties with 20 rooms or more in the state. The survey includes full service, limited service and condominium hotels.